Bootstrapping has always been a popular route to growing a start-up. It enables founders to retain control not only of their business’s equity, but also its strategic direction. It can be a winning approach; many large companies, including GoPro and Mailchimp, became huge successes without external funding.
Following a decade of record-low interest rates, the world economy is now far less friendly to business owners seeking capital injections into fledgling businesses. According to Crunchbase, global VC investing fell 35% in 2022.
This doesn’t mean that start-ups are doomed to fail, though. By implementing the approaches set out here, start-up founders can set their businesses up for growth and success, without relying on external investment.
The Strategies for Success
Shake every tree
Bootstrapping hinges, first and foremost, on how much money you can supply up front yourself. However streamlined your strategy, and however lean the efficiencies you create, more starter capital will increase the length of time your start-up can survive before it generates a profit.
Many founders sell assets such as cars or property in order to inject cash into their business. Family, friends, and crowdfunders can also be non-VC sources of seed funding. You can also explore grants or loans as sources of capital. For UK-based start-ups, there are a range of funding schemes available to businesses based on their geographic location and industry.
Pursue a clear GTM strategy
Typically, successful start-ups are characterised by a clear focus on bringing their business to a point where it offers value to customers as quickly and efficiently as possible. This requires a go-to-market (GTM) strategy to act as a roadmap.
There is no single approach to creating a GTM strategy, but most contain these core elements:
- The market need. This is the fundamental problem that your product or service sets out to solve. Dropbox, for example, was conceived when its founder forgot his USB memory stick before a four-hour bus journey he’d intended to spend working. Identifying the need or gap in the market your business addresses is paramount to success.
- The target audience. Closely related to the market need is a clear idea of who is likely to feel it; these are the people or businesses most likely to buy your offering. Building a comprehensive customer persona will inform your marketing and pricing strategy.
- Competitor analysis. In short, this means an assessment of supply and demand to ensure that no-one else has already come up with your unique idea (or a better one) to solve the problem.
Pricing and distribution. Informed by all the above, your GTM strategy will include a clear plan for how to price and sell your product. For example, will you operate an e-commerce model of selling through a website, or an inbound sales model?
Build your offering with the minimum inputs possible. Approach the process with a hyper-protective mindset towards your pile of starter capital. If possible, aim for negative cash-conversion; only spend money you’ve already been paid.
Keep hiring limited to the must-have positions in the early days. It’s a cliché, but start-up founders can protect their limited resources by getting their hands dirty in all areas of the business. A small, versatile team also reduces your office and equipment costs.
Getting those key early hires right can, however, greatly improve your chances of success. Having an experienced, versatile strategist in place as Chief of Staff can free up your executive team’s bandwidth while optimising the business strategy and ensuring it is on track.
Without existing brand awareness, marketing needs to be a top priority in order to start selling your offering. The challenge lies in developing a marketing strategy that conserves resources for spending on the product or service itself. If your offering is the best it can be, there are various means by which you can raise awareness of it for free, or close to.
Make word of mouth your number one acquisition channel as early as possible. You may need to deploy a few carefully targeted ads to get this ball in motion, but keep this to an absolute minimum, and avoid altogether if you can.
You can also piggy-back on the reputations of more established brands using partnership marketing strategies such as cross-promotions, referrals, or product placement.
Leveraging your own network to its fullest extent is another invaluable source of leads. Whatever industry your start-up operates in, ensure you are regularly attending meetups and events to establish yourself within the community and identify possible customers early on.
Get in touch with Movemeon
If you’re ready to start growing your team, or you need that perfect Chief of Staff to help you get there, speak to Movemeon now to explore how we can support your growth.
About the author: Dan McEvoy is a freelance writer and editor, with extensive experience in finance, technology, HR, recruitment, and marketing content.